daytrading with $27,000 capital

S

sxtrader

I need to provide track record (and demonstrate communication skills) for a prospective employer/friend; so besides my own trading account, I am starting this "demo" equity account with $27K initial capital. The purpose is to show consistent trading income for an account size most beginners start with.

New traders often ask how much capital is needed or what is the expected percentage return from trading. The answer is we cannot measure daytrading account by percentage gains, rather by win-loss ratio and risk unit.

$25K is minimum to open a daytrading margin account with most Direct Access Brokers. I show here a TradeStation equity account with $25K+$2K, with 4-to-1 margin power. If we take a series of losses or one single disaster trade (e.g. not honoring stop loss), then the daytrading buying power will be disabled when account falls below the minimum $25K. So a $27K beginner account will have $2K of loss limit before the account locks out and you have to top-up funds to trade again.

The "washed out" experience is necessary to bring home trading discipline. I myself was washed out 5 times this way over 5 months before finally breaking even. Losing $2K a month "consistently" for 5 months and the hassle (and disappointment) of having to top-up funds, should encourage beginners to go back to their day job.

Below is my trading setup:
Monitor 1 layout
Monitor 2 layout

Here we go. Today's starting balance= $27,073.94 with no open positions.
 
Nice setups.

If you're trading futs you have the odds stacked much more in your favor, according to the criteria you have listed of being able to trade successfully.

Good trading,

JJ
 
Taken 6 trades: 3 wins, 2 scratches, 1 loss.
P/L=+$140.
Account Balance=$27,213.94.

1. JNPR shares=200 entry=$33.48 stop=$33.26 exit=$33.72 win= +$43.
2. AKAM shares=-200 entry=$35.10 stop=$35.30 exit=$35.10 scratch=-$4.
3. AKAM shares=-200 entry=$35.12 stop=$35.27 exit=$34.68 win=+$85.00.
4. WFR shares=100 entry=$87.61 stop=$87.00 exit=$87.82 scratch=+$19.00.
5. XTO shares=200 entry=$66.03 stop=$65.89 exit=$66.25 win=+$40.00.
6. TDW shares=200 entry=$52.33 stop=$52.16 exit=$52.14 loss=-$43.

Being too careful with the demo account and scalped for quick profits. Taken one loss on TDW when market turned at 3pm. With proper share sizing to, say $60 risk per trade, then profit could have been +$241. Instead of the $140 on 200 shares lot.
 

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Quote from sxtrader:

Taken 6 trades: 3 wins, 2 scratches, 1 loss.
P/L=+$140.
Account Balance=$27,213.94.

1. JNPR shares=200 entry=$33.48 stop=$33.26 exit=$33.72 win= +$43.
2. AKAM shares=-200 entry=$35.10 stop=$35.30 exit=$35.10 scratch=-$4.
3. AKAM shares=-200 entry=$35.12 stop=$35.27 exit=$34.68 win=+$85.00.
4. WFR shares=100 entry=$87.61 stop=$87.00 exit=$87.82 scratch=+$19.00.
5. XTO shares=200 entry=$66.03 stop=$65.89 exit=$66.25 win=+$40.00.
6. TDW shares=200 entry=$52.33 stop=$52.16 exit=$52.14 loss=-$43.

Being too careful with the demo account and scalped for quick profits. Taken one loss on TDW when market turned at 3pm. With proper share sizing to, say $60 risk per trade, then profit could have been +$241. Instead of the $140 on 200 shares lot.
More...

Is there any correlation to the DOW? If so would you consider YM mini-dow futures instead? At $5.00 per tick/contract it doesn't take much to make the same $140.00.

JJ2 seems to suggest this also.
 
It's a matter of history, preference, training, and finding your edge. I haven't spent much time with futures or options to comment which is the better instrument. This demo is to accumulate a track record based on stock trading.

I am sure there are successful futures, options, forex traders out there. There are also many beginners who washed out on stocks. futures, options, forex when they find that they can't control the risks and losses.

Stock trading has been fun and profitable for me. I'm sure you enjoy your futures trading too. That said, if you could link me to any forum here comparing e-minis to stocks I would certainly appreciate.

Regards,
 
Quote from sxtrader:

If you could link me to any forum here comparing e-minis to stocks I would certainly appreciate.

Regards,
More...

I don't have any links, but if you have the time I would keep track of how one of the indexes (DOW, Nasdaq 100 or S&P500) follows your trades, then you could decided which future to consider (YM, NQ or ES).

This might be time well spent in the long run.
 
Wouldn't you be better off trading 1000 share lots? You have plenty of margin to work with and if you keep a good tight stop you could have picked up $240 on the JNPR alone less commisions. Just a thought
 
I use 28k capital...whenever i i make gains intraday that push my balance over 28k i withdraw that money so i am back to 28k...I use to let my profits build in the acct but it it made me think i had that much lose and i always would end up losing those gains thru wreckless trades.When i keep the acct at 28k its like i am starting at zero and i have to be careful not to go negative so i am more careful not careless.
I mostly daytrade but if i have a losing position i will carry overnight....At the market botttom 2 weeks ago my acct went to 25.5 holding msft,t and verizon I tried guessing the bottom and maxed out my 108k buying power and was forced to sell out60k of equity at end of day.I was a day early as the market soared the next day....
I am very conservative in stock selection as i almost exclusively trade dow30 stocks(i will sometimes trade orcl,yhoo).If you trade these dow 30 stocks you will not have to worry holding positions over night as opposed to a crox,bgen,csco etc...i trade T mostly all day long.It has nice intraday moves.
Sometimes trade only 200 shares but mostly 500-1000.
I was short 200 T this mornig then shorted 1000 @41.94...got out at 41 87 and the last 200@ 41 67...

I did buy yhoo in the last hour when it sold off-1000@24 43 and 1000@24 15 ,,,,sold at 24 28 and 24 54


I always feel confident about buying shorting these stocks as they have few surprises and are proxies for the market so they lead the market and dont stall out unlike 3rd tier stocks like jnpr,crox that have a mind of their own....

I used to play nasdaq only and that stuff can just blow up in your face.For daytrading you might wanna start out following dow stocks u like and paper trade em at first.See which ones appeal to you or have the best patterns for your style.

I am no where near as successful as my nasdaq days but i am up 25% since july.
 
Hi dsq,

Would you consider trading futures and e-minis like the other guys suggested? Whyonly trade stocks as they say?

Holding losers overnight .... hmm ..... what can I say.

As you can see below link, there are different results on the same market conditions. This demo account should emulate a beginner with low risk limits and gradually build up the share size when market conditions are better.
Virtual Office
 
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